Governments all over the world tend to protect their agriculture sector through steps like subsidies, protectionist policies and support prices. Since the support prices had been introduced, Pakistan’s farmers have stepped up output at an encouraging rate. Unlucky for them though as a lag is visible in the government’s implementation of procurement policies, leaving the farmers particularly the small farmers, frustrated and unprotected.
The government’s procurement policy is not doing what it was intended to do. With a surplus of 2.4 million tons of wheat from the last year, there is not much room for this year’s produce to be bought off the farmers and stored. And, even if it is bought off, it would only increase financial burden on the exchequer. This is the reason why the government is using delaying tactics in procuring the crop. This has resulted in a grey area as well. Big cultivators can hedge their loss while the small ones can’t, leading them to sell their crop at a rate well below the support price, in some areas as low as 800 Rs per 40 kg while the government had set it at 950 Rs per 40 kg.
Support prices do have a secondary function; they help a country become self-sustained by offering an incentive to the farmers. But the same is being misused in more than one way. If the government cannot purchase the produce, it must allow it to be exported with a proper monitoring system. On the other hand, if these small scale farmers are left at the mercy of free market forces as some are advocating, they would lose by a great margin. A discouraging situation for not only wheat growers but also for the farmers in general.
A comprehensive review of the procurement policy is a must along with a monitoring system on the market forces. Small cultivators must be given a priority for the crop procurement, particularly in areas which were devastated by floods last year while the big land owners can be offered a quota based export mechanism. Discouraging the farmers now would only lead to a lack of trust on the government’s ability to protect farmers, as well as leading to food imports in future.
